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HARMONY/EVANDER - PROPOSED SCHEME OF ARRANGEMENT

Release Date: 23/07/1998 10:12:00      Code(s): HAR HAROEVR
HARMONY
HARMONY GOLD MINING COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/38232/06)
NASDAQ TRADING SYMBOL: HGMCY
("HARMONY")
EVANDER GOLD MINES LIMITED
(FORMERLY KINROSS MINES LIMITED)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 63/06226/06)
("EVANDER")
PROPOSED SCHEME OF ARRANGEMENT CONCERNING THE ORDINARY SHAREHOLDERS OF EVANDER
1. INTRODUCTION
FURTHER TO THE ANNOUNCEMENT DATED 24 JUNE 1998, SECURITY HOLDERS IN HARMONY AND
EVANDER ARE ADVISED THAT ON TUESDAY, 21 JULY 1998 THE HIGH COURT OF SOUTH
AFRICA (WITWATERSRAND LOCAL DIVISION) ORDERED THAT A MEETING OF EVANDER
SHAREHOLDERS, OTHER THAN HARMONY, BE CONVENED ("THE SCHEME MEETING") TO
CONSIDER THE SCHEME OF ARRANGEMENT IN TERMS OF SECTION 311 OF THE COMPANIES
ACT, 1973 (ACT 61 OF 1973), AS AMENDED, PROPOSED BY HARMONY BETWEEN EVANDER AND
ITS SHAREHOLDERS, OTHER THAN HARMONY ("THE SCHEME").  IF THE SCHEME IS
IMPLEMENTED, IT WILL RESULT IN EVANDER BECOMING A WHOLLY-OWNED SUBSIDIARY OF
HARMONY AND THE LISTING OF THE EVANDER SHARES ON THE JOHANNESBURG STOCK
EXCHANGE ("THE JSE") AND THE LONDON STOCK EXCHANGE BEING TERMINATED.  THE
LISTING OF INTERNATIONAL DEPOSITORY RECEIPTS REPRESENTING EVANDER SHARES ON THE
BRUSSELS STOCK EXCHANGE WILL ALSO BE TERMINATED.
IN TERMS OF THE SCHEME, EVANDER SHAREHOLDERS, OTHER THAN HARMONY, REGISTERED AS
SUCH AT THE CLOSE OF BUSINESS ON FRIDAY, 28 AUGUST 1998 ("THE SCHEME MEMBERS"),
WILL RECEIVE:
1.1  58,3 ORDINARY SHARES IN HARMONY FOR EVERY 100 ORDINARY SHARES HELD IN
EVANDER ("THE SHARE CONSIDERATION"); OR
1.2  26,4 ORDINARY SHARES IN HARMONY AND R740,48 IN CASH FOR EVERY 100 ORDINARY
SHARES HELD IN EVANDER ("THE SHARE AND CASH ALTERNATIVE").
EVANDER SHAREHOLDERS WHO WISH TO RECEIVE THE SHARE AND CASH ALTERNATIVE MUST
COMPLETE AND RETURN THE RELEVANT PORTION OF THE FORM OF SURRENDER AND ELECTION
ENCLOSED WITH THE DOCUMENT TO BE SENT TO EVANDER SHAREHOLDERS IN REGARD TO THE
SCHEME IN ACCORDANCE WITH THE INSTRUCTIONS THEREIN, FAILING WHICH THEY WILL BE
DEEMED TO HAVE ELECTED TO RECEIVE THE SHARE CONSIDERATION IN TERMS OF THE
SCHEME.
THE NOTICE CONVENING THE SCHEME MEETING, WHICH WILL BE HELD ON FRIDAY, 14
AUGUST 1998, IS PUBLISHED SIMULTANEOUSLY HEREWITH.  A GENERAL MEETING OF
EVANDER SHAREHOLDERS ("THE EVANDER GENERAL MEETING") WILL BE HOLD ON THE SAME
DATE AND AT THE SAME VENUE TO CONSIDER THE RESOLUTIONS NECESSARY TO IMPLEMENT
THE SCHEME.
2. SALIENT DATES
                                                      1998
LAST DAY TO LODGE FORMS OF PROXY FOR THE GENERAL
MEETING OF EVANDER SHAREHOLDERS BY 10:00 ON           WEDNESDAY, 12 AUGUST
LAST DAY TO LODGE FORMS OF PROXY FOR THE SCHEME
MEETING BY 09:30 ON                                   THURSDAY, 13 AUGUST
LAST DAY TO REGISTER IN ORDER TO VOTE AT THE SCHEME
MEETING BY THE CLOSE OF BUSINESS ON                   THURSDAY, 13 AUGUST
SCHEME MEETING HOLD AT 09:30 ON                       FRIDAY, 14 AUGUST
GENERAL MEETING OF EVANDER SHAREHOLDERS
HELD AT 10:00 ON                                      FRIDAY, 14 AUGUST
COURT HEARING TO SANCTION THE SCHEME AND CONFIRM
REDUCTION OF CAPITAL ON                               TUESDAY, 25 AUGUST
RECORD DATE TO DETERMINE PARTICIPATION IN THE
SCHEME AT THE CLOSE OF BUSINESS ON                    FRIDAY, 28 AUGUST
TERMINATION OF THE LISTING OF EVANDER SHARES ON
THE JSE AND THE LONDON AND BRUSSELS STOCK EXCHANGES
FROM THE CLOSE OF BUSINESS ON                         FRIDAY, 28 AUGUST
OPERATIVE DATE OF THE SCHEME                          MONDAY, 31 AUGUST
COMMENCEMENT OF LISTING OF HARMONY CONSIDERATION
SHARES ON THE JSE AND THE LONDON AND BRUSSELS STOCK
EXCHANGES AND THE PARIS BOURSE FROM THE COMMENCEMENT
OF BUSINESS ON                                        MONDAY, 31 AUGUST
HARMONY CONSIDERATION SHARE CERTIFICATES AND,
WHERE APPLICABLE, CHEQUES IN RESPECT OF THE CASH
PORTION OF THE SCHEME CONSIDERATION AND FRACTIONAL
ENTITLEMENTS TO HARMONY CONSIDERATION SHARES, POSTED
TO THE SCHEME PARTICIPANTS (IF DOCUMENTS OF TITLE ARE
RECEIVED PRIOR TO THE OPERATIVE DATE OR, FAILING THAT,
WITHIN FIVE BUSINESS DAYS OF RECEIPT THEREOF BY THE
TRANSFER SECRETARIES) ON                              MONDAY, 31 AUGUST
LAST DAY FOR LATE POSTAL ACCEPTANCES
(PROVIDED SUCH ACCEPTANCES ARE POSTMARKED
ON OR BEFORE FRIDAY, 28 AUGUST 1998) OF THE
SHARE AND CASH ALTERNATIVE BY 12:00 ON                WEDNESDAY, 2 SEPTEMBER
NOTES:
1. IF FORMS OF PROXY FOR THE SCHEME MEETING ARE NOT RECEIVED BY THE RELEVANT
TIME AND DATE SHOWN ABOVE, THEY MAY BE HANDED TO THE CHAIRMAN AT THE SCHEME
MEETING BY NOT LATER THAN 10 MINUTES BEFORE THE COMMENCEMENT OF THE SCHEME
MEETING.
2. THE EVANDER GENERAL MEETING WILL COMMENCE AT THE TIME GIVEN ABOVE OR TEN
MINUTES AFTER THE SCHEME MEETING HAS BEEN CONCLUDED, WHICHEVER IS THE LATER.
3. THE ABOVE DATES AND TIMES MAY BE CHANGED BY MUTUAL AGREEMENT BETWEEN EVANDER
AND HARMONY.  ANY SUCH CHANGES WILL BE PUBLISHED IN THE PRESS.
3. OPINION
STANDARD CORPORATE AND MERCHANT BANK HAS ADVISED THE BOARD OF DIRECTORS OF
EVANDER THAT IT HAS CONSIDERED THE TERMS AND CONDITIONS OF THE SCHEME AND IS OF
THE OPINION THAT THE TERMS AND CONDITIONS OF THE SCHEME, INCLUDING THE SCHEME
CONSIDERATION, ARE FAIR AND REASONABLE TO EVANDER SHAREHOLDERS.
4. FINANCIAL EFFECTS
THE FINANCIAL EFFECTS OF THE SCHEME ON EVANDER SHAREHOLDERS REGISTERED AS SUCH
AT THE CLOSE OF BUSINESS ON FRIDAY, 28 AUGUST 1998 ARE SET OUT BELOW:
4.1 MARKET VALUE
THE MARKET VALUE PER 100 EVANDER ORDINARY SHARES ON THE DATES MENTIONED BELOW
MAY BE COMPARED WITH THE SCHEME CONSIDERATION AS FOLLOWS:
           RETAIN 100   RECEIVE THE              RECEIVE THE
           EVANDER      SHARE           %        SHARE AND            %
           SHARES       CONSIDERATION   CHANGE   CASH ALTERNATIVE     CHANGE
MARKET
VALUE
(NOTE 1)   R1 180,00    R1 355,48       14.9     R1 354,26            14,8
MARKET
VALUE
(NOTE 2)   R1 650,00    R1 690,70       2,5      R1 506,06            (8,7)
NOTES:
1. BASED ON THE CLOSING MARKET PRICES OF HARMONY SHARES AND EVANDER SHARES ON
THE JSE ON TUESDAY, 23 JUNE 1998, BEING THE DAY BEFORE THE ISSUE OF THE TERMS
ANNOUNCEMENT.
2. BASED ON THE CLOSING MARKET PRICE OF HARMONY SHARES AND EVANDER SHARES ON
THE JSE ON WEDNESDAY, 22 JULY 1998, BEING THE LAST PRACTICABLE DATE PRIOR TO
FINALISATION OF THIS ANNOUNCEMENT.
4.2 CASH OPERATING PROFIT/(LOSS)
THE PRO FORMAL EFFECTS OF THE SCHEME ON THE CASH OPERATING PROFIT/(LOSS) OF AN
EVANDER SHAREHOLDER HOLDING 100 EVANDER SHARES ASSUMING THAT THE SCHEME HAD
BEEN EFFECTIVE FOR THE PERIODS INDICATED, ARE SET OUT BELOW AND ARE BASED ON:
- THE AUDITED FINANCIAL RESULTS OF EVANDER AND HARMONY FOR THE YEAR ENDED 30
JUNE 1997, ASSUMING THAT THE SCHEME HAD BEEN EFFECTIVE FOR THAT YEAR;
- THE UNAUDITED FINANCIAL RESULTS OF EVANDER AND HARMONY FOR THE NINE MONTH
PERIOD ENDED 31 MARCH 1998, ASSUMING THE SCHEME HAD BEEN EFFECTIVE FOR THAT
PERIOD.
                 BEFORE THE SCHEME
                 CASH OPERATING PROFIT/LOSS PER
                 100 EVANDER SHARES
                 (RAND)
30 JUNE 1997     236,23
31 MARCH 1998    (285,86)
                 AFTER THE SCHEME
                 RECEIVE THE SHARE             RECEIVE THE SHARE
                 CONSIDERATION                 AND CASH ALTERNATIVE
                 CASH OPERATING                CASH OPERATING
                 PROFIT/LOSS PER               PROFIT/LOSS PER
                 58,3 CONSIDERATION    %       26,4 CONSIDERATION     %
                 SHARES                CHANGE  SHARES AND R740,46    CHANGE
                 (RAND)                        IN CASH* (RAND)
30 JUNE 1997     188,91               (20,0)   146,63                (37,9)
31 MARCH 1998    (100,59)             64,8     (2,79)                99,0
*ASSUMING A SCHEME MEMBER, WITH A MARGINAL TAX RATE OF 45%, WOULD HAVE EARNED
15% PER ANNUM AND 14% PER ANNUM ON THE CASH PORTION OF THE SCHEME CONSIDERATION
FOR THE PERIODS ENDED 30 JUNE 1997 AND 31 MARCH 1998 RESPECTIVELY.
NOTE:
CASH OPERATING PROFIT/(LOSS) EQUATES TO REVENUE LESS PRODUCTION COSTS,
EXPLORATION EXPENDITURE AND SELLING AND ADMINISTRATIVE CHARGES.  THE CASH
OPERATING PROFIT/(LOSS) EXCLUDES ANY ABNORMAL OR EXTRAORDINARY ITEMS, CAPITAL
EXPENDITURE, SUNDRY REVENUE, DEPRECIATION AND AMORTISATION, RETRENCHMENTS
COSTS, RESTRUCTURING COSTS, TAXATION AND THE LIKE.
5. DOCUMENTATION
THE JSE AND THE SECURITIES REGULATION PANEL HAVE APPROVED THE CIRCULAR RELATING
TO THE SCHEME, WHICH WILL BE POSTED TO EVANDER SHAREHOLDERS TODAY.
WOODMEAD
23 JULY 1998
CORPORATE ADVISER TO HARMONY
THE CORNER HOUSE
THE CORNER HOUSE (PTY) LTD
(REGISTRATION NUMBER 97/08185/07)
LEGAL ADVISER TO HARMONY
BOWMAN GILFILLAN HAYMAN GODFREY ATTORNEYS
BOWMAN GILFILLAN HAYMAN GODFREY INC.
(REGISTRATION NUMBER 78/01915/21)
SPONSORING BROKER TO HARMONY
RICE RINALDI TURNER & CO
(A MEMBER OF THE JOHANNESBURG STOCK EXCHANGE)
MERCHANT BANK TO EVANDER
SCMB
STANDARD CORPORATE AND MERCHANT BANK
(A DIVISION OF THE STANDARD BANK OF SOUTH AFRICA LIMITED)
(REGISTRATION NUMBER 62/00738/06)
LEGAL ADVISER TO EVANDER
EDWARD NATHAN & FRIEDLAND INC
REGISTRATION NUMBER 77/00525/21
SPONSORING BROKER TO EVANDER
DEUTSCHE MORGAN GRENFELL
DEUTSCHE MORGAN GRENFELL (PROPRIETARY) LIMITED
(REGISTRATION NUMBER 73/06709/07)



                                        
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